Emisphere Technologies

Emisphere is conducting early research using its Eligen^® Technology and GLP-1, a potential treatment for Type 2 diabetes, which represents a potential market of 18 million managed patients. A second, early-stage human study of an oral formulation that combines PYY and GLP-1 has commenced. The Company expects publication of the first and second studies in 2008.

Gallium compounds are bone-targeting agents that are potent inhibitors of bone breakdown and may be broadly useful for diseases associated with accelerated bone loss. In March 2006, Emisphere entered into an exclusive worldwide licensing agreement with Genta, Inc. to develop an oral formulation of a gallium-containing compound. Under the agreement, the Company will utilize its Eligen^® Technology to supply a finished oral dosage from to Genta. Genta will be responsible for toxicology, clinical development, regulatory submissions and worldwide commercialization. An Investigational New Drug (IND) application was filed by Genta for gallium on July 31, 2007 and Genta announced that it commenced a Phase I study during the third quarter of 2007.

Novartis Pharma AG and its development partner Nordic Bioscience are currently taking Emisphere's Eligen^® Technology into Phase III development with an oral salmon calcitonin product to treat osteoarthritis and osteoporosis. Enrollment in the first trial of Phase III clinical studies for osteoarthritis is expected to be completed by the third quarter of 2008, and enrollment for the second Phase III trial should be complete mid-2009. Osteoporosis Phase III trials are also ongoing, with enrollment completion expected in the first half of 2008. When these Phase III studies are completely enrolled under their current protocols, over 5,000 clinical study patients will be using the Eligen^® Technology.

The most common indication for heparin therapy is the prevention of blood clot formation following major surgical procedures lasting longer than 30 minutes. A variety of low molecular weight heparin products are indicated for prevention of Deep Venous Thrombosis (DVT) after hip or knee replacement surgery for patients undergoing abdominal surgery, and for patients who are at risk for DVT or pulmonary embolism formation due to severely restricted mobility.

nsulin is an essential hormone for the regulation of carbohydrate metabolism. In contrast to injected insulin, oral insulin is delivered directly to the liver, its primary site of action, via portal circulation. The insulin delivered to the liver moderates hepatic glucose production, a major contributor to hyperglycemia in Type 2 diabetes. In theory, oral insulin should require less insulin per dose to produce the desired effect of reaching the liver. Furthermore, the amount of insulin that reaches the systemic circulation should be smaller and the peak shorter-lived than is the case with injectable insulin, thus reducing the chance of hypoglycemia.